Estate of Bennett et al. v. Islamic Republic of Iran et al.; Attorney General of Canada, Intervenor; Sherri Wise, Proposed Intervenor

[Indexed as: Bennett Estate v. Islamic Republic of Iran]

Ontario Reports

Court of Appeal for Ontario,

Hoy A.C.J.O., Laskin and Tulloch JJ.A.

October 11, 2013

117 O.R. (3d) 716 | 2013 ONCA 623

Case Summary

Civil procedure — Parties — Intervenors — Appellant having commenced action in British Columbia against Iran under Justice for Victims of Terrorism Act — Appellant moving for leave to intervene in action to enforce judgment obtained by respondents in United States against Iran for damages for state-sponsored terrorism — Appellant fearing that no funds would be left to satisfy her judgment or judgments of other Canadians if U.S. judgment was recognized — Appellant satisfying two criteria under rule 13.01(1) as she had contingent interest in subject matter of proceeding and might be adversely affected by recognition of U.S. judgment — Appellant having useful contribution to make as she raised issues (including limitations issue) that were not raised by other parties — Justice for Victims of Terrorism Act, S.C. 2012, c. 1 — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 13.01(1).

The appellant had commenced an action in British Columbia against Iran and the Iranian Ministry of Information and Security ("MOIS") under the Justice for Victims of Terrorism Act. The respondents had obtained a significant judgment in the United States in 2007 against Iran and MOIS for damages for state-sponsored terrorism, and brought an action in Ontario for recognition and enforcement of that judgment. The appellant moved for leave to intervene in that action under rule 13.01(1) of the Rules of Civil Procedure. The motion was dismissed. The appellant appealed.

Held, the appeal should be allowed.

The appellant satisfied two of the criteria in rule 13.01(1): she had a contingent interest in the subject matter of the proceeding; and she might be adversely affected by a judgment recognizing the American judgment. Moreover, the appellant had a useful contribution to make, as she was raising issues (including a limitation period argument) that were not raised by the other parties.

Cases referred to

Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd. (1990), 1990 6886 (ON CA), 74 O.R. (2d) 164, [1990] O.J. No. 1378, 46 Admin. L.R. 1, 45 C.P.C. (2d) 1, 2 C.R.R. (2d) 327, 22 A.C.W.S. (3d) 292 (C.A.) [page717]

Statutes referred to

Justice for Victims of Terrorism Act, S.C. 2012, c. 1, s. 2, s. 4(4), (5)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 13.01(1), (a), (b)

APPEAL from the order of D.M. Brown J. of the Superior Court of Justice dated September 30, 2013 dismissing the motion for leave to intervene in an action to recognize a foreign judgment.

Mark J. Freiman and Domenico Magisano, for proposed intervenor (appellant).

John Adair, for plaintiffs (respondents).

[1] BY THE COURT: -- The appellant, Dr. Sherri Wise, appeals the motion judge's dismissal of her motion pursuant to rule 13.01(1) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] for leave to intervene as an added party in an action to recognize a foreign judgment pursuant to s. 4(4) of the Justice for Victims of Terrorism Act, S.C. 2012, c. 1, s. 2 ( "JVTA").

The Background

[2] The background, briefly, is as follows.

[3] The appellant is a Canadian citizen and the victim of a 1997 terrorist bombing in Israel. In 2012, the JVTA was enacted, allowing victims of terrorism to sue perpetrators of terrorism and their supporters, and the appellant commenced an action in British Columbia against the Islamic Republic of Iran and the Iranian Ministry of Information and Security ("MOIS") for the damages that she sustained in that terrorist bombing.

[4] The respondents are American citizens and obtained a significant judgment in the United States in 2007 against Iran and MOIS under American legislation permitting its citizens to recover damages for state-sponsored terrorist attacks for damages suffered as a result of a different terrorist attack. The American legislation was enacted before the JVTA: the respondents were in a position to secure a judgment before the appellant.

[5] The appellant learned that the respondents were seeking to have their American judgment recognized in Canada pursuant to s. 4(5) of the JVTA. Neither Iran nor the MOIS defended the respondents' action for recognition of their American judgment, and have been noted in default. The Attorney General of Canada was, however, granted intervenor status on consent. [page718]

[6] The appellant fears that the American judgment is so significant that if recognized and enforced against Iran's assets in Canada no funds will remain to satisfy her judgment, or the judgments of other Canadians, and the JVTA will not provide what she submits is the intended, meaningful remedy for Canadian victims of terrorism sponsored by Iran. At the outset of the September 30, 2013 hearing of the respondents' motion to recognize their American judgment, she accordingly sought leave to intervene as a party on, and an adjournment of, the respondents' motion. She seeks to make an argument not advanced by the Attorney General, namely, that, properly interpreted, the JVTA does not suspend the limitation period normally applicable to an action to recognize a foreign judgment and the respondents' action to enforce their American judgment is accordingly statute-barred.

[7] The motion judge dismissed her motion, with reasons to follow, and proceeded to hear the motion to recognize the American judgment. The motion judge ordered that the hearing of that motion continue on October 31, 2013 on two discrete issues, with the parties to file factums on those issues by October 25, 2013.

[8] In his reasons for dismissing the appellant's motion, released on October 1, 2013, he determined that the appellant had not met any of the three criteria enumerated in rule 13.01(1). He wrote further, as follows:

Although I have directed that the motion continue on October 31, 2013 to hear further submissions on two discrete issues, most issues raised by the motion already have been canvassed in the written and oral submissions. With the greatest respect to Dr. Wise and her counsel, I do not see what "value added" she could have brought to the hearing. Accordingly, her lack of any legal interest in the issues raised by the [American action], when coupled with the lack of assistance she could give to the Court, made any further delay of the hearing of this motion unacceptable.

The Parties' Positions

[9] The appellant argues that the motion judge erred in concluding that the appellant had not met any of the criteria enumerated in rule 13.01(1); granting the appellant intervenor status would result in further delay; and the appellant would not make a useful contribution to the hearing. If this appeal is allowed, the appellant would file a factum by the October 25, 2013 date applicable to the parties, addressing principally the limitation period issue, and not seek to alter the October 31, 2013 date set for the continuation of the motion, or supplement the record before the motion judge. [page719]

[10] The respondents argue that the motion judge correctly concluded that the appellant did not satisfy any of the criteria in rule 13.01(1), and that, in any event, his conclusion that the appellant would not make a useful contribution to the resolution of the motion is entitled to deference. Moreover, the respondents submit that the argument that the appellants seek to advance would inevitably require the respondents to file further evidence about the extent of Iran's assets in Canada and lead to further delay.

Analysis and Conclusion

[11] In our view, the motion judge mischaracterized the nature of the respondents' interest and, as a result, erred in concluding that the appellant did not satisfy any of the criteria in rule 13.01(1).

[12] In concluding that the appellant had not demonstrated that she had "an interest in the subject matter of the proceeding", within the meaning of rule 13.01(1)(a), the motion judge wrote:

Counsel was not able to take me to any case law in which a plaintiff who had not yet obtained judgment was considered to possess a sufficient interest to enable it to intervene in enforcement proceedings already underway by an existing judgment creditor of a debtor.

[13] Similarly, in concluding that the appellant had not established that she "may be adversely affected by a judgment in the proceeding", within the meaning of rule 13.01(1)(b), the motion judge commented that counsel had not taken him to any case law which would require an unsecured judgment creditor to put its enforcement proceedings in abeyance in order to allow a contingent claimant to "catch up".

[14] With respect, until such time as the respondents succeed in having their American judgment recognized in Canada, they are not judgment creditors in Canada. Their interest is more akin to the contingent interest of the appellant. Moreover, the appellant does not seek a stay of the respondents' action.

[15] A person only needs to satisfy one of the criteria in rule 13.01(1) in order to be able to move for leave to intervene. In our view, the appellant satisfied two. She both has a contingent interest in the subject matter of the proceeding (rule 13.01(1)(a)) and may be adversely affected by a judgment recognizing the American judgment (rule 13.01(1)(b)). The appellant provided evidence from the Canadian government suggesting that Iran's assets in Canada may not be sufficient to satisfy any judgment other than the respondents'. [page720]

[16] As the respondents argue, if one of the criteria in rule 13.01(1) entitling a person who is not a party to a proceeding to intervene as an added party is made out, the motion judge then has the discretion to grant intervenor status, and the motion judge's decision to deny intervenor status is entitled to deference. In Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd. (1990), 1990 6886 (ON CA), 74 O.R. (2d) 164, [1990] O.J. No. 1378 (C.A.), at para. 10, Dubin C.J.O. indicated that "the nature of the case, the issues which arise and likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties" are considerations in determining whether intervenor status should be granted. Respectfully, in this instance, deference is displaced because the motion judge mischaracterized the nature of the case as a private commercial one between a judgment creditor and a contingent creditor. In this case, important public issues are at play.

[17] We do not agree that the respondents will not make a useful contribution to the resolution of the motion before the motion judge for recognition of the American judgment. The JVTA is new legislation, enacted with the important public objective of impairing the functioning of terrorist groups. Its interpretation is a matter of first instance. No other party seeks to make the arguments that the appellant advances, especially the limitation period argument. If the appellant is not granted intervenor status, either those arguments will not be made or, if considered and disposed of by the motion judge on his own initiative, there will be no avenue of appeal if the motion judge determination that the American judgment should be recognized.

[18] We are not persuaded that the limitation or public policy arguments that the appellant seeks to advance will necessitate the filing of further evidence by the respondent and result in further delay.

[19] Accordingly, this appeal is allowed. The appellant shall be entitled to file a factum, not exceeding 20 pages. Her factum shall be filed by October 25, 2013. The time allocated to counsel for the appellant for argument on October 30, 2013 shall be as determined by the motion judge.

[20] If the parties are unable to agree on the issue of costs, they shall be entitled to make brief written submissions.

Appeal allowed.

End of Document